How Shopiago can help you maximise your Gift Aid potential
In case you’ve forgotten how important Gift Aid is to the third sector, £1.4bn of additional funds were claimed through the government scheme in the 2019-20 tax year, benefiting 71,350 charities.
That’s an average of nearly £2,000 per charity. And they’re not even claiming all of it. At the last count, the government reckoned more than £560 million of Gift Aid had gone unclaimed, largely through simple administrative mistakes and human error.
What is Gift Aid?
Gift Aid is a government scheme that lets charities claim back tax already paid by donors. If a donor is a UK taxpayer, the charity can claim on their behalf, effectively getting an extra 25p for each pound donated. When it was introduced in 1990 Gift Aid was limited to cash gifts of £600 or more, but in 2000 the scheme was radically overhauled and the limit was dispensed with entirely. You can now claim Gift Aid on a donation of any size, and Gift Aid declarations (when a person says they are a UK taxpayer) can be spoken, rather than written.
Why aren't Charities claiming all of their gift aid?
A list of common errors on Gift Aid claims supplied by HMRC is a litany of basic slips that could have been prevented in the Gift Aid small donations scheme. It includes “simple typos” and “missing off donation dates” among the administrative blunders that cost charities part of their Gift Aid pot.
As more charities switch to a hybrid model of in-store sales and ecommerce, sometimes including a hub, the increased complexity means it is even more likely that item specifics such as the Gift Aid number can become separated from items. It’s holding back charities’ ability to claim their full Gift Aid potential. But it needn’t...
How Shopiago can help charities claim their full Gift Aid potential
With Shopiago, shops can capture the Gift Aid number right at the beginning of its sales journey, at the time of creating a product entry. Shopiago tracks the item all the way through the process, giving full visibility to charities and shops of each item’s location, sales status and any other pertinent information – and the Gift Aid number stays with it.
A common problem is that shop assistants forget to collect a Gift Aid declaration from the donor, or the Gift Aid labels become detached as products are moved between shops, or from shop to hub. Shopiago can help by making the Gift Aid box mandatory on the system so that it has to be collected as part of the transaction (there’s also a ‘does not apply’ option). Because the Gift Aid is then electronically recorded, it matters less if the label and item become separated during the online sales journey. You can also extract Gift Aid information to upload to the charity’s EPOS system – or talk to Shopiago about integration options so that this can be automated.
Gift Aid is worth a lot to charities: potentially an extra £25 per £100 donation. It’s vital for the sector that eligible donations are recorded and claimed, and Shopiago can help to make sure those administrative slips don’t happen so often, or even at all.